Module -4 EDP

Sickness of small scale industries

Sickness in Small Scale Industries refers to the decline or failure of small businesses in
operating effectively, often leading to closure. These enterprises are essential for economic
growth and development, employment generation, and innovation, but are mostly exposed to
numerous challenges. Among these challenges is inadequate access to finance and poor
management as well as lack of market demand. Moreover, government policies and global
economic conditions could threaten their condition more badly. Understanding the causes and
implications of sickness in SSIs is hereby achieved towards ascertaining how an effective
support strategy may be developed.

Symptoms of Sickness in Small Scale Industries

Symptoms of sickness of SSIs point to underlying problems that threaten the viability and
growth of such industries. Therefore, identification of these symptoms would mean timely
intervention and rehabilitation.

Declining Sales
One of the patent early symptoms of disease in SSIs often tends to be a marked decline in
sales. A number of reasons can lead to this, such as increasing competition, a shift in consumer
tastes and preferences, or changing the marketing strategy, which leads to lesser revenues and
declining profitability.

Financial Stress/ Distress

Repeated and severe financial problems with cash flow problems and increasing debts usually
mark sickness in small enterprises. When an SSI cannot meet its financial obligations, for
example, pays suppliers or employees, it would easily deteriorate into a crisis that threatens the
enterprise's survival.

Obsolescence of Technology
Failure to upgrade machinery and technology leads to inefficiency in production. Outage of
appropriate machinery with obsolete technology generally promotes unhygienic standards and,
in the long run, causes a loss of competitive position and loss of customers' confidence.

High Turnover of Employees

Failure to retain large proportions of workers shows that there must be dissatisfaction among
employees, usually caused by poor working conditions, inadequate training, or the lack of
career development opportunities. The instability created affects operations, lowers productivity,
and impacts the mood in the organization.

Poor Management Practice

Poor management practice is a strong destroyer of SSIs. Bad decision-making and lack of
strategy combined with poor control results in missed opportunities and operational chaos,
which makes matters worse for the business.
Increased Inventory Levels
Unsold accumulation of inventory is another symptom of sickness. If products are not moving as
anticipated, then it may either reflect issues in production, market demand, or pricing strategies
and subsequently financial strain because of capital being tied up in too much stock.

Reasons/ causes for Sickness in Small Scale Industries

Small enterprises play a very crucial role in economic development, although they create
several problems that have adverse effects on the productivity and working health status of
workers. Causes of sickness in these enterprises are so essential to be known for improving
health conditions during work and increased efficiency at work.

Poor Working Conditions

Probably the most serious cause of sickness in small-scale industries is poor working
conditions. There is inadequate ventilation, exposure to hazardous substances, and poor
sanitation, and it is likely that all these may cause serious respiratory problems, skin complaints,
and other health problems among employees.

Inadequate Safety Measures

In most small-scale industries, there is inadequate proper safety measure implementation. This
leaves the employees vulnerable to injuries in case of accidents without proper PPE and safety
measures, which may lead to various health complications in the long term.

Limited Access to Healthcare

Small-scale industries usually do not allow the workers medical care. This denies health care
support to them, and the diseases would not be dealt with; they may even worsen relatively
small diseases, and thus they affect the general welfare of the workforce.

Stress and Mental Health Issues

High pressure often prevails in small-scale industries, and it can be a mental health-causing
factor. Long working hours, job insecurity, and unsatisfactory supportive systems bring issues of
anxiety and depression to the life of employees, even affecting their health and productivity.

Lack of Training and Sensitization

Lack of training and awareness in occupational health and safety contributes to the high levels
of sickness among employees. Employees who are not aware of the safe practices or the
danger that exists around them in their working environment are less likely to take precautions
that would safeguard them in health.

Economic Constraints
Economic constraints often keep small-scale industries from investing their allocated resources
into the necessary health and safety installations. This consequently causes it to fail in respect
of maintaining a healthy workplace environment, increased illness among workers, etc.

Remedies for Sickness in Small Scale Industries

Dealing with an illness in small-scale industries is necessary to improve health for the
employees and general productivity. Effective remedies will create a safer environment of work
and promote wellness among workers.

Improving Working Conditions

One of the best solutions against sicknesses in small-scale industries is improving the working
conditions. Good ventilation, good light, and tidy and clean workspaces can reduce health
hazards through the physical environment to a minimum.

Safety Measures
Robust safety measures are introduced with respect to reducing the risk of hazards against
employees. Supplying personal protective equipment along with an elaborate safety setting may
reduce the chances of accidents and injuries in workplaces, which makes a workplace healthier.

Improving Health Care Access

One of the important ways through which small-scale industries can ensure early diagnoses and
treatments of health issues is by providing health care services to their employees. Health care
providers can be engaged by small-scale industries in their locality or health insurance provided
to them so that health care can be availed from preferred health care facilities without causing
financial strain.

Promoting Mental Health Support

A great support in the implementation of mental health programs at the work place relieves
much anxiety in employees. Providing counseling services, stress management workshops, as
well as creating a culture that supports mental well-being, will improve mental health overall.

Training and Awareness

Required to create a culture of safety is the training on occupational health and safety. Safety in
practice and knowing of dangers makes an informed employee safe; hence, an individual
empowered to take active prevention measures against health hazards.

Investment in Financial Resources

An improvement in health and safety could prove a long-term benefit to the businesses. For
small-scale industries, this could be augmented by seeking government grants or partnership
opportunities to invest in infrastructure that is always necessary to reduce sicknesses and
improve employee morale and productivity.

List of Sick Small Scale Industries in India

SSIs are essentially crucial for the Indian economy. The objectives of SSIs include promotion of
entrepreneurship and employment. Though they are relatively very important, yet many of them
ultimately turn out to be "sick." Such an aspect deserves support and revival.

Handloom Industry
A business traditionally established, the handloom industry greatly suffers from the presence of
power looms and synthetic fabrics. Many weavers face low wages and access to the market,
resulting in financial breakdown and loss of this cultural activity.

Small-scale Manufacture
Small-scale manufacturing units, especially those in textile and plastic productions, typically
face problems about machinery being old and lack of enough capital. Such issues make them
unable to manufacture goods continuously and generate enough profits for the sustenance of
business activities.

Food Processing
Although the food processing industry in India is of great potential, it suffers from various
regulatory hurdles and lacks proper infrastructure. Major small units lack proper facilities to be
developed as quality control and marketing, hence displaying mediocre performance and
viability.

Handicrafts
The handicraft sector suffers from a lack of innovative designs and marketing support. This
therefore affects the artisans' livelihoods. Traditional crafts are threatened by changes in
consumers' preferences and competition with mass-produced goods, thus making many units
not viable.

Leather Goods
Pollution regulation and declining demand would probably affect leather goods. The working
conditions of local artisans and workers are under pressure due to stricter means of compliance
and accessing markets.

Printing and Publishing

It reduced the printing and publishing industry, which negatively impacted many small-scale
publishers. Most of these do not incur investments in embracing the new technologies and,
therefore, are left with low earnings and relevance.

Agarbatti (Incense Stick) Manufacturing

The agarbatti manufacturing sector has been facing problems with raw material shortages as
well as changes in demand. Further, there are also several tiny units which incur financial
strains based on the cheaper imported ones along with a need for quality consistency.

Small Scale Engineering

There is often a deficit of skilled labor and modern technology under small scale engineering.
This stagnation does not allow them to compete as well as an ability to complete orders, thereby
driving them into financial pressures.

Role of banks and government

Banks and governments play critical, interconnected roles in reviving industries and fostering
entrepreneurship by mobilizing capital, providing targeted financial support, and creating a
supportive regulatory environment.

Role of Banks

Banks serve as the backbone of the financial system, acting as intermediaries that channel
savings into productive investments. Their specific roles include:

Providing Capital and Credit: Banks offer various financial products such as working capital
loans, term loans, and credit lines for operations, expansion, and R&D efforts. This access to
capital is essential for business formation and growth.

Facilitating Financial Intermediation and Capital Formation: By mobilizing savings from

individuals and institutions, banks convert non-productive financial resources into investable
capital, which fuels industrial development.

Risk Management Services: Financial institutions help businesses manage risks associated with
currency fluctuations, interest rate changes, and other market volatilities through various
financial instruments and insurance products.

Supporting Specific Sectors: Banks often have dedicated programs and lending targets for
priority sectors like agriculture, MSMEs, and infrastructure, which are crucial for balanced
economic development.

Advisory and Consultancy Roles: Beyond just funding, banks offer business advisory and
consultancy services, guiding entrepreneurs on financial management, investment
opportunities, and business planning to help them avoid common pitfalls like mismanagement or
poor planning.

Implementing Government Schemes: Commercial and specialized banks are the primary
channels for disbursing government-backed loans, subsidies, and grants aimed at stimulating
specific industries and promoting entrepreneurship.

Role of the Government

The government provides the policy framework and strategic direction for industrial revival and
entrepreneurship development. Key functions include:
Policy Formulation and Regulatory Reforms: The government creates a conducive business
environment through policies, regulations, and licensing rules that simplify business
incorporation, reduce the compliance burden, and attract investment.

Financial Support and Incentives: Governments provide targeted financial assistance through
schemes, grants, and subsidies (e.g., interest subvention schemes, capital subsidies, and tax
benefits) to encourage new ventures and support existing ones, particularly in backward or
priority areas.

Establishing Supportive Institutions: The government sets up specialized financial and support
institutions such as the Small Industries Development Bank of India (SIDBI), the Industrial
Development Bank of India (IDBI), and the National Bank for Agriculture and Rural
Development (NABARD) to cater to the specific, long-term financing needs of various sectors.
Infrastructure Development: By investing in physical infrastructure (roads, power, industrial
parks) and digital infrastructure, the government reduces operational costs for businesses and
makes industrial areas more accessible and viable.

Skill Development and Training: The government funds and organizes entrepreneurship
development programs (EDPs), skill training initiatives, and technical support through various
centers to build a skilled workforce and nurture entrepreneurial talent.
Market Support and Promotion: Government initiatives help entrepreneurs with marketing
support, access to domestic and international trade fairs, and procurement policies that favor
small enterprises, helping them access new markets.